James Henderson

How NAB built global engineering muscle to overhaul home lending

In operating at the beating heart of a highly competitive financial services sector, Paul Norman has a first-hand understanding of the never ending tension between delivering new capabilities while simultaneously attempting to simplify complex environments.

This is an industry dependent on delivering bleeding-edge technology at huge scale and relentless speed – it’s a classic case of “easy to say, harder to do”.

“But the real challenge extends beyond this,” said Norman, speaking in his capacity as Executive CIO of Personal Banking at NAB. “In the Australian banking sector, we’re in an arms race to meet – and exceed – customer expectations. As one institution takes a giant leap in one area, the others fight to keep up.”

Paul Norman (NAB)

While such competition is commonplace in a market shaped by evolving user requirements and a commitment to embracing emerging technologies, Norman acknowledged that specific to the area of home lending, “there was very little leaping going on”.

Historically, the home lending experience left a lot to be desired with a troubling knack of turning a highly anticipated and exciting moment into one that was often filled with dread and disappointment.

“Picture this,” Norman explained. “As a prospective buyer, you would spend your weekends from open house to open house, pouring over the dimensions of floor plans and desperately trying to imagine yourselves in it.

“Eventually, you would find the one – the perfect place. The one that brought you to the big city. The one where you could raise a family. Or the one where you could see yourself retiring happily.”

Armed with payslips in hand, customers would then naturally head to an existing bank or broker to secure the unconditional approvals needed. Standard practice, correct?

“But often that’s where the nightmare began,” Norman added.

“Your excitement would slowly diminish as you come to terms with the long drawn-out and manual process of applying for a mortgage. And though you found your dream house, your bank tells you they’ll have an answer for you in the next 30 days.”

Then the doubt kicks in. Will I get approved? Should I put a bid in anyway? How much should I go to?

“Fortunately for customers of Australian banks, those days are a distant memory,” Norman clarified. “The banks looked at the experience and said; ‘that is not even close to good enough’. So we set out to do something about it.”

Building global engineering muscle

Addressing delegates at the Future of Financial Services conference in Sydney, Norman outlined how NAB tapped into a global engineering workforce to reboot the home lending experience, underpinned by an enhanced cloud strategy.

“We started the journey with our engineering capability,” he said. “As a technology division, we wanted to be known as the best engineering bank in the Southern Hemisphere.

“It’s a big, audacious ambition – and to make it happen we needed a conscious effort across a number of fronts. And central to that, is our engineers.”

But with Australian talent markets remaining stretched and the lowest unemployment figures in decades, Norman and his team recognised the need to tap into a bigger talent pool beyond local borders.

The motivation was simple; to access a global engineering workforce capable of opening new talent markets – some tapped, some untapped – that would provide NAB with the confidence required to make “future focused, buy and/or build decisions” for large implementations such as home lending.

To create an extension of local team capabilities, the organisation ramped up efforts to build expertise in Vietnam and India, which now houses hundreds of NAB employees in locations such as Ho Chi Minh City, Hanoi and Gurugram.

“Our colleagues in these locations have deep technical expertise across a range of fields including technology, engineering, cyber security and financial crime, working alongside Australian colleagues on projects that matter to our customers,” Norman outlined.

In addition to spinning up new office locations across the region, NAB also doubled down on insourcing engineering capabilities.

“After years of watching talented colleagues ‘ebb in’ and ‘flow out’ as part of our vendor resources, instead, we wanted to bring them into the fold permanently, helping us to better align the work that needed to be done for our customers and improve our customer service with a 24/7 ‘always on’ model,” Norman explained.

Since 2018, NAB has transitioned from a workforce that was 70% outsourced to 37% at the end of 2022 and according to Norman, “we’re still working to progress that”.

During the same time period, over 1,000 technology interns have been hired – with 60% going on to obtain a permanent position – which makes NAB one of the largest employers of technology resources in Australia.

For home lending, access to this global team was the critical enabler for the company’s ambitious overhaul program.

Within the space of nearly two years, global engineering teams worked with local teams to deliver over 1000 features, develop 30,000 story points and complete more than 100,000 hours of automated and manual testing.

“Beyond this, we were able to bring together one team that crossed geography, culture and engineering capability – and create something special for our customers,” Norman added.

“Where we integrated both new and existing technologies to build an experience that was simple, digital and – most importantly – one that was able to return joy to the experience of buying a home.”

Within this context, IT investment within the banking sector in Australia is set to reach $27.3 billion by the end of 2023, representing a 7.6% increase compared to the previous year.

According to Gartner, software spending is forecast to represent the largest growth segment of all technology solutions and services deployed, totalling $6.7 billion at an increase of 14%.

“Current economic headwinds have changed the context for technology investments in banking and investment services this year,” said Debbie Buckland, Director Analyst at Gartner. “Rather than cutting IT budgets, organisations are spending more on the types of technologies that generate significantly higher business outcomes.”

As noted by Buckland, banking CIOs are also expected to spend the largest amount of new or additional funding on cyber security, data and analytics, integration technologies and cloud. Notably, more than half plan to increase investments in cloud, while reducing IT spending in their own data centres.

Maximising cloud native architecture

Upon acquiring engineering talent at scale, Norman accepted that NAB couldn’t simply hire talented engineers and point them at a problem – “we needed a mature delivery model to achieve it”.

Four years ago, the business unveiled plans to launch a cloud-first, multi-cloud strategy and as of today, more than 75% of all cloud applications are housed within the public cloud.

This is a story the bank has told many times before but for Norman, this one decision has proved to be the “single most important technology foundation” in driving enhanced experiences for customers and employees.

“So with our cloud foundations, we had the tools,” he explained. “And with a global engineering team embedded with our business, we’d created the space. We were crystal clear on the problem; ‘how could we home-grow a fully digitised origination solution that delivers customers an unconditional approval in less than an hour’.”

The answer, according to Norman, was three-fold:

  1. A cloud native, digital engine that converged the many ways customers and brokers applied for a home loan into a single reusable process
  2. Digitisation of reimagined operational processes
  3. Full automation and straight through processing using world-class digital and data capabilities

During the past two years, global teams have worked together to develop an all-new, modular ecosystem. This ecosystem is not only tasked with driving improved outcomes at a fraction of the cost but holds the ability to transform the way in which NAB responds to a changing lending market.

“In the past banks would need to scale up or down physical operations teams to respond to changes in demand,” Norman said. “The focus on full automation and straight through processing through all parts of the home buying journey has digitised unnecessary manual processes and retained human intervention where it counts most.”

As a result, NAB’s cloud native services can now respond “immediately and independently” – changing the business of home lending operations and redefining customer experience in the process.

“It’s a solution that is so advanced and flexible that it is capable of supporting all of our future lending requirements,” Norman added. “But far more important than the benefits we get from the technology is how it’s transformed the experience for our customers.”

Through this approach, Norman said NAB has helped to return “confidence and excitement” to moments like buying a home, helping bring “sharp purpose” to working in both technology and banking.

“Here’s a real story from one of our brokers reporting back on a particularly happy customer,” Norman shared. “Upon completion of the loan application, they had received full, unconditional approval in less than twenty minutes – with digital documents delivered to their inbox ready to sign.

“The experience was so surprising, that the customer had to call the broker to confirm that the documents were in fact genuine. And that is an experience worth writing home about.”


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